Today was the Starbucks Biennial Investor Conference in New York City. Speakers included Howard Schultz, Cliff Burrows, Michelle Gass, Jeff Hansbury, and Troy Alstead.
This morning I tweeted a few quotes in my twitterfeed, but the whole conference was 6 hours long, so I only caught some excerpts here and there.
For those who missed some of the interesting tweets from this morning, here are some highlights:
*About one-third of the Starbucks stores in the United States are licensed. About 70% of that business is represented by four license partners: Target, HMS Host, Safeway, and Kroger. (per Cliff Burrows)
*John Culver talked about the international business. He noted that there are only 72 Starbucks in Eastern Canada and noted that there is room for growth there.
* Michelle Gass announced a new retail SBC bar design, flexible, and distinctive, with the first of the new SBC coffee bar design opening this Friday (December 3, 2010) in Toronto! The image associated with this blog shows off the new SBC coffee bar design concept! This is very exciting news.
* Michelle Gass talked about that SBC can end up in millions of vending machines nationwide.
* Michelle Gass talked about the good partnerships with Burger King and Subway.
* On the Starbucks Card … Annie YS talking about that the free card reward incentivizes “trial” … People try new drinks. Starbucks has thought about ideas like “double stars from 3 to 5 pm” or “double stars when buying a pound of coffee or a French press.” (Not perfectly verbatim but close).
*Currently @Starbucks is in 32 cities in China. Goal: By 2015 Starbucks plans to have 1,500 stores on mainland China. (per John Culver)
*18% of Via buyers are new to the coffee category. Via Ready Brew is bringing “younger buyers to the market” per Jeff Hansbury.
* “Iced Via will be introduced into the Consumer Product Group space this Spring” – So grocery stores get Iced Via Ready Brew Spring 2011. #Starbucks Jeff Hansbury
* Starbucks announced that “Acosta” will lead the retail distribution of @Starbucks products in CPG category starting 3-1-11 (per JeffHansbury)
* Per Troy Alstead’s slide: Starbucks repurchased 11 million stock shares in fiscal 2010.
I only caught a small segment of this broadcast, and you can restream all 6 hours of it through the investor relations page at Starbucks.com. I think that the restreaming becomes available tomorrow.
Anyone who was listening, please feel free to add your two cents. While I don’t have much above, I genuinely thought that those were some interesting talking points. Take a look at the SBC coffee bar of the future! What do you think? Would love to know your thoughts on anything from today’s conference!
((Edit on December 4, 2010 – I added a screen shot of one of the slides from the conference. This is the Frappuccino slide and notice that the twitter profile featured on it belongs to @Waaaldooooo! I have been following her on twitter for a while and when I saw this I was happy to a twitter friend featured in a slide! If you are not following Jessica (@Waaaldooooo) then please follow her now. She is a passionate Starbucks partner.))
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Just curious—what does it mean for a Starbucks to not be licensed? I don’t know much about how it works on the business end. From the stat on how many ARE licensed and who has those licenses, am I correct to assume that the licensed ones are like…well, how the Target stores have Starbucks inside, so obviously it’s not just a Starbucks. But it’s a location that is licensed to…include a Starbucks?
Does that make sense at all? My brain is a little fried from all the research papers I’ve been writing. I hope I made sense!
Anyway, seeing iced VIA in grocery stores would be pretty awesome! 🙂
A licensed store is staffed by employees of the host locations (Target, Safeway, etc) and a license fee is paid to Starbucks based on sales. A non-licensed store would be your regular Starbucks locations, with Starbucks own employees, etc.
Does Starbucks require their licensed stores to offer the same benefits they offer at the Company owned stores (health care, education reimbursement, CUP fund, etc.)?
@CD
actually no. license partners do not get any partner benefits including but not limited to: free 1lb whole bean coffee, health care, 30% discount
@Karl—Thanks! That’s interesting to know! 🙂
Very interesting details at the meeting today. Seems like SB is trying to capture a more diverse market share and I hope this direction works without taking away the orginial goals of the company. I like reading that they are thinking of expanding the rewards program and hope they can expand it beyond what you mentioned. I am not sure I like the idea of double stars between 3-5 pm or when purchasing merchandise. I hope they would perhaps widen the options. The SBC design looks really nice!!! Also, would like to hear more about what their goals are re licensed stores. Lastly, as you mentioned that they would be opening the international market, does that mean they will not be opening any new stores in USA? Great post.
the ‘double star’ possibility is interesting. also kind of scares me….I have not seen that they have been consistent or even …seems to me….sure of what they’re doing now re: rewards.
Melody, thanks for taking the time to share a few updates about the conference. I like the possibility that Rewards stars might be tweaked, for example, awarding an extra star for higher-priced items or for certain times of day.
More Seattle’s Best Branding news:
http://www.underconsideration.com/brandnew/archives/follow-up_seattles_best_coffee.php
Using Seattle’s Best to reach a lower quality market is seeming like a better and better idea, it would be nice if eventually as licensed locations contracts come up for renewal that Starbucks would convert them all to Seattle’s Best, save the luxury brand for Starbucks.
The Seattle’s Best design looks very nice. Are there many Seattle’s Best stores? The only Seattle’s Best around here is at Borders, where they have the mezzanine floor, and I’ve been to the one at Pike Place Market.
Great post Mel! I’m so excited to see the new SBC bar design. Luckily, I will get a chance to see it first-hand as I live and work in Toronto. Do you know the address of the store? Let me know and I’ll go take pictures for you!
@jetblue @Anthony and @Andrew
@jetblue – Just want to say I completely agree that it is a good idea to convert some of the Starbucks licensed stores to SBC.
@Anthony – I like the new store design. It looks like coffee meets the Jetsons.
@Andrew – Can you go to the grand opening this Friday in Toronto??? That would be soooo coool. Actually that would be a perfect blog post for your own blog. If you go you must must go in the morning and say hello to Michelle Gass from me! I adore her.
Jetblue & Melody — good idea to convert the licensed locations, especially at places like Target, Safeway and Kroger, but I’m thinking that could get tricky in some situations, such as airports and hotels. I believe all airport locations are licensed, and frequent travelers especially may not appreciate that change. As far as hotels, chains such as Marriott or Hyatt would probably want a more “upmarket” brand. Same thing with Barnes & Noble (I don’t know if those are considered licensed stores since they’re branded as Barnes & Noble Cafes). Having Seattle’s Best wouldn’t work at Barnes & Noble since they’re in Borders stores Also, how much would cost to rebrand these locations and train the staff? Would operators want to bear that cost?
@CD: re the benefits of the licensed store employees…….except the ones re: their coffee….I feel pretty sure those employess (of whatever store….Target etc) would be getiing the same benefits as other store employees?? Specifically I’m referring to health insurance..etc.
and I agree about the sirport Sbux…there’d be lots of unhappy travelers about that! I know people who were traveling, delayed and eventually THRILLED to get a cup of PPR, which they normally would NOT prefer. I don’t know….it’s kind of a mess.
As usual, thanx for all all the scoops Melody.
Great post, Melody!
I agree with Anthony – I like seeing the Starbucks stores at the airports!
China is the most incredible market right now…I am always stunned when I see how all that developed there. 😀
I would love to see some pics of stores in China!
What is the real advantage to SB to have licensed stores vs. corporate stores besides money? The bottom line is do licensed stores really represent the brand in the way corporate SB wants it to? I know people buy franchises and some are good and some are bad.
@CD: I hope you were able to get your Christams blend espresso today (BOGO),it was allowed. There did, of course, turn out to be some question about whether one still recvd a tall drink….after a couple different register attempts, it did work out.
wrong thread, I see.
There is huge growth potential in Eastern Canada. There are some store opening on the books for the region and with the Quebec market opened it’s going to be a matter of time…AMAZING and exciting! As fast as you can say, Mezzo Cafe Frappe Frappuccino Caramel. ( the french calling for a Caramel Frappuccino) 😉
@denise r – Yes, I did get the BOGO. I didn’t have my registered card with me so I didn’t get a free drink, but wow, that makes for quite treat, bogo and free drink.
Thanks for thinking of me!
NON SBUX SIDE COMMENT FOR DENISE: BTW, the State Street windows are disappointing this year. I appreciate that they were hand made from paper, but I remember when Fields had the entire block and around both corners as part of the windows. Also, the trumpets look like they only painted the green to red and never refreshed/touched up the gold. Disappointing.
It’s kinda funny…with so much coffee out there and everyone doing their thing…and Starbucks keeps growing and growing. It’s pretty amazing and it’s coffee, but the business end of it is really facinating. I have a book about starbucks and the starbucks connection with people. I can’t remember the name of it right now but I believe you blogged about the author a while back. I need to read that book. I ran across it at the book store and felt it would be a fascinating read. Now to just make the time LOL. I saw your tweets between classes and wanted to respond but we get just enough time for bathroom breaks and a quick drink of water. I’m glad you posted them here so I didn’t have to dig through twitter…because I would have *SMILE*
re licensed stores:
Not all are the same, and evidently even vary from north and south of the border. For example, I work in a Chapters, and we are a licensed concept store. Some from the US might think we are like Borders, but that is not the case at all. If you come to us, we make things to standard (closer than corporate many times, sad to say-I say sad to say b/c standards should be just that, and it’s frustrating to customers to go to two places that claim to be the same and have different experiences) and know all about our coffee beans. We also sell all starbucks products, although sometimes we don’t get everything corporate gets.
As for benefits, for us they ARE pretty great. But that varies company to company. I don’t know what other companies offer, but am very grateful for ours. I have found that Indigo (chapters) and starbucks have similar philosophies in taking care of employees and serving customers.
That said, not all licensed stores are created equal. I’ve had to save more than one customer from bad experiences they’ve experienced elsewhere in town, and re-convince them that they love their favorite drink. Which should never happen.
That’s me!!! Thanks for all the support melody.